From one of my favorite publications, a very insightful look at the challenges and yes, opportunity facing the newspaper industry. Of course the news is bad -- dwindling circulation, loss of ad revenue, slow response -- but scattered amongst the debris, there is some hope. My POV is that this evolution will in the end prove to be a Good Thing for the art of journalism. A couple of key passages:

For most newspaper companies in the developed world, 2005 was miserable. They still earn almost all of their profits from print, which is in decline. As people look to the Internet for news and young people turn away from papers, paid-for circulations are falling year after year. Papers are also losing their share of advertising spending. Classified advertising is quickly moving online. Jim Chisholm, of iMedia, a joint-venture consultancy with IFRA, a newspaper trade association, predicts that a quarter of print classified ads will be lost to digital media in the next ten years. Overall, says iMedia, newspapers claimed 36% of total global advertising in 1995 and 30% in 2005. It reckons they will lose another five percentage points by 2015.

Okay, well, that is grim -- but not news. The trend line is evident and has been for a while.

For the past couple of years, however, newspapers have been thinking more boldly about what to do on the Internet. At its most basic, that means reporting stories using cameras and microphones as well as print. The results can be encouraging. America's Academy of Television Arts & Sciences has introduced a new Emmy award for news and documentaries on the Internet, mobile phones and personal media players. Five of the seven nominations for this September have gone to reports by nytimes.com and washingtonpost.com.

It also means being more imaginative. In the late 1990s, the early years of the Wall Street Journal's website, one of the paper's journalists came up with the novel idea of posting online a 573-page document that backed up an article. “It wasn't the most compelling content,” remembers Neil Budde, its founding editor and now general manager of news at Yahoo!, an internet portal. But it was a start. Now newspapers have a better idea of what works online. This is not always traditional journalism as taught in journalism school. Brian Tierney, who became owner of the Philadelphia Inquirer after Knight Ridder sold it last year, noticed that a popular item on the paper's website has been a video of Mentos mints causing a 2-litre bottle of Diet Coke to explode into the air. “We should do more of that,” he says.

Well, there is a ray of light -- this is a good example of what we call digital storytelling -- the ability to effectively move from one medium to the next to make a point.

There is more, of course, this being The Economist. :) But my takeaway, and one I've expressed to member of the press recently, is that there is a huge role to be played by the MSM -- good writing, good reporting, is not going to be replaced by user generated content, and people will pay, and advertisers will advertise, in areas where there is great content -- online and off.